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Having staved off the immediate threat to his leadership of the Labour Party, David Cunliffe yesterday fought to turn the Donghua Liu blowtorch back on the Government by claiming it set him up.

Mr Cunliffe emerged from crisis talks with his front bench yesterday including his former leadership rival Grant Robertson claiming he had the backing of his caucus.

His leadership was looking precarious and his credibility dented following revelations he had written in support of Liu's residency bid eleven years ago in spite of earlier denials of any involvement with the millionaire property developer. His misfortunes were further compounded yesterday by a Stuff Ipsos poll showing Labour's support slumping to 23 per cent.

However, he told reporters: "There is no question of any leadership challenge we are united caucus and we're going forward to win this election".

Prime Minister John Key yesterday acknowledged he had known for some weeks that Mr Cunliffe had written a letter supporting Mr Liu's application for residency.

Mr Cunliffe seized on that saying: "You should ask the Government how come the Prime Minister had a copy of that letter when media put in an OIA on Monday and it came to media by Wednesday and he had it two weeks earlier".

That was a question he put to acting Prime Minister Bill English in Parliament yesterday.

He later told the Herald he decided the front foot the issue in Parliament because of "the recognition that the prime minister's own admission that he'd had the letter for weeks before it was issued through an OIA and the inconsistency between the way that OIA was treated and other similar requests".

That had "created a very strong impression in the public mind that the Government's been playing politics with this issue".

"People are starting to realise now that it's starting to look like a political beat up."

Immigration Minister Michael Woodhouse, whose department released the letter to the Herald on Wednesday, said he'd learned of it on May 9. He was told of the letter after he asked the department to review Mr Liu's file following questions from the Opposition and media about his dealings with Liu.

He initially told reporters yesterday that he wasn't aware that Mr Key had received a copy of the letter before Mr Cunliffe was made aware of it on Wednesday.

"I haven't spoken to John Key at all about the Donghua Liu situation. It's possible officials have briefed his office on the existence of the letters. I'm not aware whether or not they were passed on."

However he later "clarified" his comments saying his office had briefed Mr Key's office about the letter within a few days of learning of it.

But last night a spokesman from Mr Woodhouse's office confirmed the Immigration Minister told an official from Mr Key's office about the letter just a couple of day after learning of it. He also confirmed a copy of the letter was given to Mr Key's office some time late last month.

"Mr Cunliffe has been running his own dirty tricks campaign and it seems to be working. He hasn't been telling himself what he's been doing."

Minister's accountMay 8: Immigration Minister Michael Woodhouse is questioned in the House and by media about his meetings and any National Party association with Donghua Liu. Mr Woodhouse requests information on the file to see if there is anything relevant that he needs to know about. The Herald requests Liu's residency file under the Official Information Act (OIA)

May 9: In response to file review, Mr Woodhouse is verbally advised - among other things - of the existence of two Parliamentary advocacy letters regarding Donghua Liu, one from Mr Cunliffe and another from the office of Chris Carter.

Weekend of 10-11 May: Mr Woodhouse informs Prime Minister John Key's Office of the existence of the letters.

16 June: The Herald run story on Labour donations and connections. The Herald's OIA request is declined on privacy grounds. The Herald puts in a refined OIA request for MP representations for Donghua Liu to Immigration NZ.